The single greatest miss in retail store metrics: Footfalls
Beyond the basic financial metrics of volume, revenue and margin, most retail chains are measuring assortment and inventory performance through metrics like Inventory Turns, Stock to Sales Ratios, and many are moving toward GMROII – Gross Margin Return on Inventory Investment. Even the smallest retail chains are measuring some form of “Market Basket”, at least in terms of ratios of profitable accessories attached to a core item like a PC or Tablet.
.. The critical question: If there are no increases in sales or profits, was the fail due to lack of conversion based on better a consumer experience, or simply a lack of consumer traffic? Or conversely, if retail financial performance improves, how much of the gain is due to better footfalls of the right consumers, and how much is due to store execution?